Farm Belt Braces for Steep Income Drop, Trade Spats

U.S. farmers are gearing up for another tough year. Farm incomes are expected to hit their lowest since 2006 and borrowing costs are rising, federal data show, as a deepening slump in the agricultural economy enters its fifth year.A string of bumper corn and soybean harvests has added to a glut of grain worldwide, eroding prices for U.S. farmers. Foreign rivals like Russia and Brazil are also chipping away at U.S. dominance in the global grain trade, helping to fuel a multiyear downturn that is pushing some farmers out of business.“The state of the rural economy is fragile,” Agriculture Secretary Sonny Perdue told lawmakers during a hearing of the House Agriculture Committee on Tuesday. “There’s a lot of stress and a lot of duress on the farms today.”The U.S. Department of Agriculture on Wednesday forecast that farm incomes would fall 7% to $60 billion in 2018 on lower crop and livestock revenue, less than half of the record $124 billion farmers earned in 2013. Farmers are already borrowing more tokeep farms running, the Federal Reserve Bank of Kansas City said last week. The bank said lending at agricultural banks jumped in the fourth quarter of 2017, compared with a year earlier. Heavier borrowing comes as interest rates are also rising, increasing farmers’ loan payments. Interest expenses tied to farm real estate are projected to hit the highest levels since 1989 this year, the USDA